Nexstar: 5 Different Insiders Have Sold Shares This Month

Jul. 1.14 | About: Nexstar Broadcasting (NXST)

Summary

5 insiders sold Nexstar stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

3 of these 5 insiders decreased their holdings by more than 10%.

Nexstar Broadcasting Group (NASDAQ:NXST) operates as a television broadcasting and digital media company in the United States.

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Insider selling during the last 30 days

Here is a table of Nexstar's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Option Exercise & Sale Rule 10b5-1 Current Ownership Decrease In Ownership
Julie Pruett SVP June 25 5,000 Yes No 3,695
shares + 55,000 options
7.8%
Lisbeth McNabb Director June 25 1,250 Yes No 0 shares + 5,250 options 19.2%
Elizabeth Hammond SVP June 25 1,000 Yes No 730 shares + 29,000 options 3.3%
Brian Jones EVP June 25 30,000 Yes No 10,500
shares + 68,000 options
27.6%
Perry Sook CEO June 25 223,141 Yes No 925,956
shares + 976,859 options
10.5%
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There have been 260,391 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Nexstar's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 260,391 0
May 2014 0 0
April 2014 0 0
March 2014 6,230 0
February 2014 0 0
January 2014 0 0
December 2013 40,000 0
November 2013 95,000 0
October 2013 0 0
September 2013 394,250 0
August 2013 910 0
July 2013 0 0
June 2013 483,000 0
May 2013 3,943,376 0
April 2013 0 0
March 2013 84,983 184
February 2013 3,450,000 0
January 2013 0 0
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There have been 8,758,140 shares sold and there have been 184 shares purchased by insiders since January 2013. The month of June has seen the most insider selling this year.

Financials

Nexstar reported the first-quarter financial results on May 8 with the following highlights:

Revenue $133.8 million
Net income $7.4 million
Cash $50.6 million
Debt $1.1 billion
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(Source: Investor presentation)

The stock spiked up $5 on June 25 following the Supreme Court ruling against Aereo. The five insiders sold their shares after the spike.

Outlook

Nexstar expects to generate free cash flow in excess of $350 million during the 2014/2015 cycle.

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(Source: Investor presentation)

Competition

Nexstar's competitors include Gannett (NYSE:GCI), and Sinclair Broadcast Group (NASDAQ:SBGI). Here is a table comparing these companies.

Company NXST GCI SBGI
Market Cap: 1.53B 6.97B 3.37B
Employees: 2,854 31,600 6,400
Qtrly Rev Growth (yoy): 0.19 0.13 0.46
Revenue: 523.96M 5.33B 1.49B
Gross Margin: 0.70 0.45 0.56
EBITDA: 178.27M 1.06B 507.98M
Operating Margin: 0.22 0.16 0.23
Net Income: 4.86M 343.27M 72.43M
EPS: 0.16 1.47 0.85
P/E: 310.19 20.90 40.68
PEG (5 yr expected): 9.87 1.15 5.75
P/S: 2.83 1.30 2.19
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Nexstar has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
GCI 2,000 286,656
SBGI 0 126,954
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Only Nexstar has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Nexstar and there have not been any insiders buying Nexstar during the last 30 days. Three of these five insiders decreased their holdings by more than 10%. Nexstar has an insider ownership of 7.90%.

Before going short Nexstar, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high P/S ratio, and the intensive insider-selling activity.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.